Canadian Pacific Ups CFO’s Pay 61%

The Canadian Pacific railyard is pictured in Port Coquitlam, British Columbia in this file photo dated Feb. 15, 2015.
Photo:
REUTERS

The finance chief of Canadian Pacific Railway Ltd. is getting his second raise in four months, an indication the company is trying to retain top talent as its former chief executive aims to lead a competitor.

The company upped Nadeem Velani’s total compensation by 61% to $1.8 million, according to a Tuesday regulatory filing. Mr. Velani became interim CFO last September, and was permanently named to the role in October. He succeeds Mark Erceg who left the company after 16 months to take the CFO role at Tiffany & Co.

The board of directors’ pay vote comes a month after the company’s chief executive officer Hunter Harrison abruptly left Canadian Pacific. He is now vying for the CEO gig at competitor CSX Corp.

A spokesman for Canadian Pacific said the CFO’s raise had nothing to do with Mr. Harrison’s departure or potential job at CSX. The boost was based on the need to offer compensation that is “competitive with those offered by competing [North American] railroads,” he said in a written statement.

Mr. Harrison left $89 million on the table at Canadian Pacific. Under the terms of his separation agreement, the railroad agreed to allow the former CEO to work for another Class 1 railroad other than Canadian National Railway Co., BNSF Railway Co. or Union Pacific Railroad.

But it also includes a clause stating that the former CEO cannot hire senior employees of the company for 36 months, with the exception of his former chief of staff, Mark Wallace.

Still, the kind of raise Mr. Velani received is more common as the market for CFO talent heats up.

“We’re seeing more and more retention bonuses under unusual circumstances,” said Peter Crist, chairman of recruitment firm Crist|Kolder Associates. Companies are willing to offer “make whole” packages to lure executives.

“It’s a crazy hot market right now,” he said.

Mr. Velani’s base salary was raised $45,000 to $460,000, according the regulatory filing. His short term incentive plan is now 75% of his base salary, up from 60%. His long-term incentive opportunity was raised to 225% of his base salary.

Mr. Velani joined the company in March 2013, as the vice president of investor relations. He previously worked in different roles at Canadian National Railway Co., where Mr. Harrison was the president and chief executive officer for nearly seven years.

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